World Economic Forum release: Singapore leads global tech revolution, highlighting Asia’s digital poverty

Shanghai, April 30, 2015 – Singapore is the number one country in the world when it comes to using information and communications technologies (ICTs) to drive social and economic development, according to the World Economic Forum’s The Global Information Technology Report 2015, published recently.

  • Singapore ranks number one in the World Economic Forum’s ICT rankings of 143 economies. Japan, Asian Tigers all in top 20
  • China maintains its position at 62nd, with Malaysia at 32nd, the highest-placed developing Asian economy; Mynamar remains the region’s lowest ranked
  • Globally, the report finds “digital poverty” an increasing problem, with the world’s developing and emerging economies failing to close the ICT gap with more advanced nations

The city state replaces Finland at the top of the report’s annual Networked Readiness Index (NRI), which assesses 143 economies in terms of their capacity to prepare for, use and leverage information and communications technologies. The only other Asian nation in the top 10 is Japan, which climbs six places year-on-year to 10th position. Hong Kong SAR and the Republic of Korea both exit the top 10, falling from 8th to 14th and 10th to 12th places respectively. Asia’s Tiger economies all remain in the top 20, however. China, the region’s largest economy, remains stable at 62.

Since 2012, despite improving its score, China has dropped 11 places in the overall rankings because other countries have improved faster than it has. China is becoming more innovative. Patent applications — an imperfect measure of innovation capacity — have shot up since 2000. “But for ICTs to have a truly transformative impact on Chinese society and economy, they have to permeate the entire society, including rural areas. Tertiary education should become more widespread — not just reserved for the elite. ” said Adam Xu, Partner at Strategy& (a part of the PwC network), “And despite a handful of corporate success stories, the culture of entrepreneurship and startups has yet to take root in a country where state-owned enterprises still dominate many segments of the economy.”

The picture throughout the rest of Asia reflects the widespread digital poverty that persists in the region. Two-thirds of the countries fall in the bottom half of the ranking. Only Malaysia, at 32nd, stands out. Mongolia (61st), Sri Lanka (65th) and Thailand (67th) lag some 30 places behind, while India drops a further six places to 89th, making it the worst-performing economy in the BRICS grouping in 2015: it has dropped 21 places in the past two years.

Globally, seven of the top 10 countries are from Europe while the highest-placed G7 economy is the United States (7th). Indeed, data from the report suggest that the gap between the best and worst performing economies is widening. Those in the top 10% have seen twice the level of improvement since 2012 as those in the bottom 10%. This demonstrates the scale of the challenge facing developing and emerging nations as they seek to develop the infrastructure, institutions and skills needed to reap the full benefits of ICTs, as only 39% of the global population enjoys access to the internet despite the fact that more than half now owns a mobile phone.

Elsewhere in the world, progress by the world’s larger emerging markets towards networked readiness has been largely disappointing. The Russian Federation is the highest placed BRICS nation, climbing nine places in 2015 to 41st. It is joined in the top half of the ranking by China, which remains at 62. All other members of the group have declined, with South Africa coming next (75th, down five), followed by Brazil (84th, down 15) and India (89th, down six).

“The example of the BRICs is not unique: many other countries that have improved their NRI ranking over the last decade or so are now facing stagnation or regression. This is partly down to persisting divides within countries between rural and urban areas and across income groups which is resulting in large portions of the population being left out of the digital economy,’’ said Bruno Lanvin, Executive Director of INSEAD’s European Competitiveness Initiative (IECI) and Global Indices projects.

“The report shows that the digital divide across nations is increasing and this is of great concern, given the relentless pace of technological development. Less developed nations risk being left further behind and concrete actions are needed urgently to address this,” said Soumitra Dutta, Anne and Elmer Lindseth Dean at the Samuel Curtis Johnson Graduate School of Management at Cornell University and co-editor of the report.

With high-income economies predictably occupying the top 30 places, the report does identify a number of countries that have made considerable improvements, both in terms of their index score and ranking by implementing targeted reforms. Among those punching above their weight are Armenia (58th), Georgia (60th) and Kazakhstan (40th), which are among the most improved nations since 2012. Outside of the Caucasus and Central Asia, the UAE (23rd), El Salvador (80th), Macedonia FYR (66th), Mauritius (45th) and Latvia (33rd) all improved markedly during the same period.

“Mobile telephones may be becoming ubiquitous around the world, but the ICT revolution will not be carried over voice or SMS. Without better access to affordable internet, a huge proportion of the global population will continue to live in digital poverty, missing out on the enormous social and economic benefits that the ICTs represent,” said Thierry Geiger, Senior Economist, World Economic Forum and co-author of the report.

With the report confirming the extremely high correlation between ICT adoption by individuals, businesses and government, and the capacity to generate economic and societal impact, it also notes that government leadership in the creation of a good regulatory and business environment with competitive ICT markets is a fundamental requirement for all countries.

But while government action is necessary to address digital divides, efforts must also be made to encourage people to participate in the digital economy, argues Adam Xu, Partner at Strategy&. “Emerging markets need to ensure a sustainable supply of local and relevant digital content if they are to give more people reasons to go online. This requires coordinated action among the major players, who have a significant role in the development of the digital ecosystem: governments, brands, operators and content developers. More and better local content will help to provide jobs and higher incomes to millions of people in emerging markets.”

Under the theme ICTs for Inclusive Growth, The Global Information Technology Report 2015 also features 10 essays from leading experts and practitioners that showcase solutions to allow everyone to benefit from and participate in the ICT revolution.

The report is the result of a partnership between the World Economic Forum, INSEAD and the Samuel Curtis Johnson Graduate School of Management at Cornell University. As a long-standing supporter, Strategy& (Formerly Booz & Company) was honoured to continue its involvement in the report this year.

The editors of the report are Soumitra Dutta, Anne and Elmer Lindseth Dean and Professor of Management, Samuel Curtis Johnson Graduate School of Management, Cornell University; Thierry Geiger, Senior Economist, World Economic Forum; and Bruno Lanvin, Executive Director, Global Indices, INSEAD.

About the Networked Readiness Index
Since 2001, the Networked Readiness Index (NRI) assesses on an annual basis the factors, policies and institutions that enable a country to leverage information and communication technologies (ICTs) for shared prosperity. This assessment is based on an aggregation of 53 individual indicators grouped in four main components: environment, readiness, usage and impacts. The individual indicators uses a combination of data from publicly available sources and the results of Executive Opinion Survey, a global survey of 13,000 business executives conducted by the World Economic Forum in collaboration with its network of 160 Partner Institutes.

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